Employee infighting is a real turnoff for customers: Study

It's a no-brainer that when employees are rude to customers, business suffers.

But a new study finds the bottom line is hit just as hard — sometimes to the tune of hundreds of millions of dollars — when employees are rude to each other and customers see it.

According to researchers, onlookers' anger over witnessing such incivility causes them to stew longer over what they saw, which in turn, leads to harsher verdicts about the staff, the company as a whole, and any future dealings there.

In fact, even if the observed rudeness is in the customer's defence, as part of a reprimand for poor service, the same effect holds — suggesting, ultimately, that what people will tolerate even less than an incompetent worker is one with no sensitivity.

"We hear so often that customers only care, 'What's in it for me?'" says study co-author Christine Porath, assistant professor of management at Georgetown University. "But we found this (reaction) was primarily driven by the fact that, morally and ethically, we don't like seeing others mistreated."

Most surprising to investigators, whose study appears in the August issue of the Journal of Consumer Research, was an experiment in which patrons were left waiting for service while a female employee gossiped on the phone. This employee was later scolded in front of them by a fellow worker.

"We expected people to think, 'She had it coming,'" says Porath. "But no, they still felt really strongly that (the public rebuke) was wrong."

Two previous studies by organizations of different sizes — one a communications company, the other a hospital — have estimated the cost of employee incivility to be anywhere from $12 million a year to "hundreds of millions," says Porath. Lost business factors in, as does turnover, with 12 per cent of employees leaving a firm due to perceived mistreatment.

Incivility, in terms of this study, denotes belittling or demeaning comments, such as "you're an idiot."

"It shows a total lack of sensitivity and empathy," says John C. Williams, senior partner with J.C. Williams Group in Toronto. "You praise in public, scold in private."

But Williams, a retail consultant, believes an increase in training and greater awareness of workplace bullying — which he notes can now get a company sued — have reduced such incidents in recent years. The latest statistics from a health and productivity watchdog suggest he's right.

While in 2007, Shepell.fgi, a health information provider, reported that conflict in the Canadian workplace had shot up 22 per cent over the previous three years, spokeswoman Lisa McLachlan says the year-over-year increase in 2009 was less than one per cent.

Nevertheless, you don't have to look far to find supervisors who, without a second thought, will publicly admonish employees.

Mark Julien, associate professor of business at Brock University in St. Catharines, Ont., believes the problem is that managers misguidedly assume that a public display of zero-tolerance somehow endears them to the customer.

"It may be the manager's intention to show that, 'I'm really standing up for you,' but the long-term collateral damage is that it's going to alienate both the employee and the customer," says Julien.

"Awareness of harassment and of employees' rights now makes us more indignant when we witness those things firsthand."

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